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S&P, US-PHL group see economic reforms beyond 2016 elections


Standard & Poor's Ratings Services (S&P) and the US-Philippines Society (USPS) expect economic reforms to be sustained in the coming years, even after a change of administration as a result of the May 2016 elections.

The Bangko Sentral ng Pilipinas' Investor Relations Office IRO said in a statement Monday that S&P and the USPS were both addressing the concerns of foreign investors about the Philippines' ability to maintain economic reforms of the Aquino administration after a new President takes the helm of government.

"Our assumption is that change in leadership is unlikely to reverse the economic reforms in the Philippines," S&P Sovereign Debt Committee Chair John Chambers was quoted as saying during the Philippines Business and Investment Forum (PBIF) in New York City on March 3.

The change in administration will not disrupt the favorable credit standing of the Philippines as the next President is unlikely to initiate a reversal of the existing economic and business policy environment, Chambers noted.

Good economic policies

In a separate statement last month, S&P analyst Ivan Tan said, "The Philippines' robust economy will likely continue to drive expansion in domestic credit at about two to three times GDP (gross domestic product) growth."

This was echoed by US-Philippines Society, an organization made up of business and civic leaders from both countries.

"Any incoming administration is expected to keep the good economic policies," said retired Ambassador John F. Maisto.

Maisto, the incumbent president of the US-Philippines Society, noted that the presidential candidates in the 2016 elections seemed to embrace the overall economic agenda of the Aquino administration. It's in the execution in achieving the goals that may be different, he said.

The leadership change will not affect the attractiveness of the Philippines as an investment destination, he added.

"The Philippines is said to have one of the greatest economic stories recently, evolving from the 'sick man of Asia' to 'a bright spot in the region,'" the IRO said.

Modest inflation

The Philippine economy grew by an average of 6.2 percent in terms of gross domestic product (GDP) from 2010 to 2015. The Aquino administration took over the reins of government in June 2010.

Last year, the GDP expanded by 5.8 percent.

The International Monetary Fund (IMF) expects the Philippine economy grow by 6.0 percent this year.

"Robust growth was achieved while maintaining a modest inflation environment," the IRO noted.

Latest data from the Philippine Statistics Authority (PSA) showed that inflation slowed down to 0.9 percent in February.

With these macroeconomic fundamentals, including a "strong external payments" position, the IRO said the IMF has invited the Philippines to participate in its lending facilities.

"The country is now a net creditor to the IMF, turning around from previously being a net borrower," it added. – Jon Viktor Cabuenas/VDS, GMA News

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